Holiday pay for irregular hours

If your hours or pay change from week to week, GOV.UK says holiday pay is based on your average pay over the previous 52 weeks, counting only weeks in which you were paid. The result must reflect your normal rate, which includes commission and regular overtime. It matters most for bank staff, casual workers, supply staff and anyone on a zero-hours contract, and for shift workers whose pay varies with enhancements.

The 52-week average

Your employer takes your pay over the last 52 weeks in which you were paid and averages it. For an hourly rate, only hours worked and the pay for those hours are counted. A week usually runs Sunday to Saturday, and another seven-day period can be used only if that is how your pay is worked out.

If you had a week with no pay, it does not count as a zero. Your employer counts back another week, so the figure covers 52 weeks with pay. The look-back can go up to 104 weeks. If you have fewer than 52 weeks of pay, the average is based on the full weeks you have worked.

If you are paid monthly, divide the month’s pay by the hours worked that month to get an average hourly rate. Multiply it by your weekly hours to get a weekly figure, then average the weekly figures across the last 52 weeks.

A worked example

Say you work on a hospital bank. Over the last 52 paid weeks your average pay was £260 a week. When you take a week of leave, your holiday pay for that week should be £260, even if the week you booked off would have been a quiet one. Your payslip should show the pay, and your right to a payslip explains what it must include. The take-home pay calculator shows what a gross figure looks like after tax and National Insurance, and holiday pay and tax explains how it is taxed.

What counts as normal pay

GOV.UK says all leave must be paid at the normal rate. That rate includes commission and regular overtime payments, and payments linked to length of service or professional qualifications. It usually does not include bonus payments.

In the NHS, enhancements for nights and weekends can form part of normal pay for holiday if they are regular. Enhancements and holiday pay in the NHS covers how that works under Agenda for Change. Check your payslip for the lines that make up your usual pay.

How much leave you build up

The leave itself is calculated separately from the pay. The statutory minimum is 5.6 weeks, capped at 28 days. For workers with irregular hours, GOV.UK says entitlement builds up as 12.07% of hours worked in a pay period, rounded up to the nearest hour if the result is 0.5 or more. For example, 30 hours worked in a weekly pay period gives 3.621 hours, which rounds to 4 hours. Holiday entitlement covers the wider rules, and zero-hours contracts covers your other rights if your hours are not guaranteed.

For leave years beginning on or before 31 March 2024, GOV.UK says leave does not have to be accrued from hours already worked, and entitlement can be estimated from the average days or hours worked each week.

Rolled-up holiday pay

Employers can use rolled-up holiday pay for irregular-hours and part-year workers. That means holiday pay is paid with your normal pay as you work, instead of when you take leave. GOV.UK says it cannot be used for a leave year that began on or before 31 March 2024. If your contract or payslip mentions rolled-up pay, ask your employer how the amount is calculated.

If you think you are underpaid

Start by asking for the calculation in writing, and compare it with your payslips for the reference period. If it does not match, raise it with payroll and then HR. For help, GOV.UK points to Acas on 0300 123 11 00, and your trade union can often check the figures. If you cannot resolve it, a claim for unlawful deductions or unpaid holiday pay goes through Acas early conciliation first, which Acas early conciliation explains.